High-def differences highly confusing

TEXT OF INTERVIEW

Doug Krizner: Maybe a DVD player is on your holiday shopping list. If so, you're in luck: Manufacturers are urgently slashing prices.

Let's look at why with Andrew Edgecliffe Johnson of The Financial Times. Andrew, we're in the midst a war over DVD formats. We got Blu Ray versus HD-DVD. Are these price cuts about trying to steal market share?

Andrew Edgecliffe Johnson: The problem has been that there's been enormous confusion among consumers. So many of us are going out this Christmas to buy high-definition television sets, but when we come to deciding which DVD player should go with it, it's quite unclear whether you should bet on Blu Ray or HD-DVD. Now what we've heard is that the prices of the players are suddenly coming down quite rapidly.

Krizner: Could you give me a sense of what the psychology is on the part of the manufacturers? Why are they cutting prices so deeply?

Johnson: Well, what's happened here is that these high-definition players have really been a luxury item until now. They were retailing for about $1,000. Now, we're seeing Blu Ray players come down to below $300, we're seeing HD-DVD players come down to below $200. That's making it much more of a mass-market item.

Krizner: Now, Blu Ray has more than 70 percent of the market share for high-definition DVDs sold in this country. Is it possible for the HD-DVD format to catch up, do you think?

Johnson: What we're hearing is that it would only really take one of the big movie studios to switch sides. The one that's sitting on the fence is Warner Brothers. If they come off the fence and swing their weight behind either Blu Ray or HD-DVD, it could still change the pattern they have.

Krizner: Why is the timing of these price cuts so significant?

Johnson: Christmas is always the most important season for this business. So if they don't get it right this season, the fear among the movie industry is that the high-definition DVD business could be skipped altogether if they don't get it right now.

Krizner: Andrew Edgecliffe Johnson of The Financial Times in London. Thanks so much for talking to us.